Gift Aid

The Probe - May 2006

Charities are missing out on more than £400 million per year because Gift Aid is not always reclaimed on donations. Taxpayers can ensure Customs & Revenue tops up every donation through Gift Aid. All they need to do is tell the charity they are a taxpayer and it can reclaim the tax from the Revenue.

Charities can claim back 28% tax relief through Gift Aid for every £1 donated by taxpayers. Higher-rate taxpayers can also claim relief on their charitable donations at 18% - the difference between the 40% higher rate of tax and the 22% basic rate.

The tax relief must be claimed through a self-assessment tax return, but it means that a £100 gift to charity will cost higher-rate taxpayers only £76.92 if they claim back the tax. The charity can also claim and bump the gift up to £128.21.

When you donate, you will be asked to confirm whether or not you are a UK taxpayer. Please note that tax can only be reclaimed on donations made by individuals who pay UK income or capital gains tax at least equal to the amount reclaimed on their donations in the current tax year.

Many UK charities including Dentaid use a partner like Justgiving.com to help claim GiftAid and take payment. With services like Justgiving you can set up an account which helps you claim the additional higher rate tax relief by keeping an accurate record of your donations. All you need to do is simply print out a copy of your donations history and attach it to your tax return.